10QSB/A

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-QSB/A

x Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2004

¨ Transition Report Pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period of              to             

Commission File Number 0-7865.

SECURITY LAND AND DEVELOPMENT CORPORATION

(Exact name of small business issuer as specified in its charter)

Georgia	58-1088232
(State or other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

2816 Washington Road, #103, Augusta, Georgia 30909

(Address of Principal Executive Offices)

Issuers Telephone Number (706) 736-6334

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Year)

Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  x    NO  ¨

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

Class	Outstanding at April 30, 2004
Common Stock, $.10 Par Value	5,247,107 shares

Transitional Small Business Disclosure Format:    YES  ¨    NO  x

SECURITY LAND AND DEVELOPMENT CORPORATION

AND SUBSIDIARY

Form 10-QSB

Index

Part I	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheet as of March 31, 2004	1
	Condensed Consolidated Statements of Income for the Six Months Ended March 31, 2004 and 2003, and the Three Months Ended March 31, 2004 and 2003	2
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2004 and 2003	3
	Notes to Condensed Consolidated Financial Statements	4-5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5-6
Item 3.	Controls and Procedures	7
Part II	OTHER INFORMATION
Item 6.	Exhibits and Reports on Form 8-K	7
	SIGNATURES	8

This amended Form 10-QSB is being filed to reflect an adjustment to the gain on sale of real estate previously reported for the quarter ending December 31, 2003. The gain on sale of real estate previously reported was incorrect in that the basis of the property sold had not been fully included in the gain calculation.

Part I. Financial Information

SECURITY LAND AND DEVELOPMENT CORPORATION

AND SUBSIDIARY

Condensed Consolidated Balance Sheet

(Unaudited)

	March 31, 2004
ASSETS
Current assets
Cash	$	72,719
Lease payment receivable		27,000
Total current assets		99,719
Investments and other assets
Replacement funds		409,728
Land and improvements, at cost		2,021,478
Property leased to others under operating leases, less accumulated depreciation $1,099,920		4,458,489
Deferred tax asset		12,516
Deferred commission, net		43,686
Other assets		5,000
		6,950,897
	$	7,050,616
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	134,406
Current portion of long-term debt		241,804
Current tax liability		82,376
Total current liabilities		458,586
Long-term debt, less current maturities		3,179,118
Deferred taxes		294,976
Deferred income		275,264
Stockholders’ equity
Common stock, at par value		623,761
Paid-in capital		333,766
Retained earnings		1,985,145
		2,942,672
Less subscribed shares		100,000
		2,842,672
	$	7,050,616

See notes to condensed consolidated financial statements.

1

SECURITY LAND AND DEVELOPMENT CORPORATION

AND SUBSIDIARY

Condensed Consolidated Statements of Income and Comprehensive Income

(Unaudited)

	Three Months Ended March 31, 2004			Six Months Ended March 31, 2004			Three Months Ended March 31, 2003			Six Months Ended March 31, 2003
Revenues, rent earned	$	195,813		$	411,852		$	193,830		$	376,747
Operating expenses:
Payroll and related costs		19,489			36,098			19,367			35,682
Depreciation/ amortization		33,394			66,862			36,194			72,388
Property taxes		28,272			59,629			24,248			51,601
Repairs and maintenance		9,830			18,125			11,496			25,996
Professional services		11,771			11,771			8,582			14,580
Insurance		366			816			2,024			3,600
Other		9,527			19,985			10,497			17,973
		112,649			213,286			112,408			221,820
Operating income		83,164			198,566			81,422			154,927
Nonoperating income and (expense):
Gain on sale of real estate		—			205,928			—			—
Interest income		34			72			136			379
Interest expense		(65,968	)		(133,079	)		(70,261	)		(141,504	)
		(65,934	)		72,921			(70,125	)		(141,125	)
Income before income taxes		17,230			271,487			11,297			13,802
Applicable income taxes		5,723			86,876			3,124			3,816
Net income	$	11,507		$	184,611		$	8,173		$	9,986
Income per common share	$	.00		$	0.04		$	.00		$	.00

See notes to condensed consolidated financial statements.

2

SECURITY LAND AND DEVELOPMENT CORPORATION

AND SUBSIDIARY

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended March 31, 2004 and 2003

(Unaudited)

	2004			2003
Cash flows from operating activities
Cash received from leases	$	440,906		$	417,105
Interest received		72			379
Cash paid to suppliers and employees		(176,305	)		(197,082	)
Interest paid		(133,079	)		(141,504	)
Net cash provided by operating activities		131,594			78,898
Cash flows from financing activities
Principal payments on debt		(102,155	)		(99,781	)
Net cash used in financing activities		(102,155	)		(99,781	)
Net increase (decrease) in cash		29,439			(20,883	)
Cash at beginning of period		43,280			116,385
Cash at end of period	$	72,719		$	95,502
Reconciliation of net income to net cash provided by operating activities:
Net income	$	184,611		$	9,986
Deferred income taxes		(4,250	)		3,816
Depreciation/ amortization		66,862			72,388
Gain on sale of real estate		(205,928	)		—
Net change in assets and liabilities		90,299			(7,292	)
Net cash provided by operating Activities	$	131,594		$	78,898

See notes to condensed consolidated financial statements.

3

SECURITY LAND AND DEVELOPMENT CORPORATION

AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements

Note 1 - Summary of significant accounting policies

The accompanying financial statements are presented in accordance with the requirements of Form 10-QSB and consequently do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America or those normally made in the Company’s annual Form 10-KSB filing. Accordingly, the reader of this Form 10-QSB may wish to refer to the Company’s Form 10-KSB for the year ended September 30, 2003 for further information.

The financial information has been prepared in accordance with the Company’s customary accounting practices and has not been audited. In the opinion of management, the information presented reflects all adjustments necessary for a fair statement of interim results. All such adjustments are of a normal and recurring nature.

Earnings per share are based on the weighted average number of shares outstanding for the applicable period. For all periods presented the weighted average number of shares were 5,247,107. The Company does not have any equity or debt instruments that cause diluted earnings per share.

Note 2 - Investment in leases and property under operating leases

Property leased or held for lease to others under operating leases consists of the following at March 31, 2004:

Land	$	385,874
Warehouse and buildings		5,172,535
		5,558,409
Less accumulated depreciation		1,099,920
	$	4,458,489

Refer to the Company’s Form 10-KSB for the year ended September 30, 2003 for further information on operating lease agreements and terms.

During the quarter ending December 31, 2003 the Company sold the investment property located at 4269 Washington Road. The sale transaction has been structured as a tax-deferred like-kind exchange. As of March 31, 2004 the Company had identified potential replacement properties but had not yet completed the acquisition of the replacement property. The funds for acquisition are being held by a third-party intermediary and are presented on the Company’s balance sheet as Replacement Property Funds. The property located at 4269 was sold by the Company for a net (after normal closing costs) sales price of $409,728. All of this net sales price was received by the Company in cash (placed directly with an intermediary for the completion of the Section 1031 exchange.) The cost basis of the property sold was $203,800. The gain was calculated as the difference between the net sales price and the cost basis of the property.

4

Note 3 - Long-term debt

Long-term debt consisted of the following at March 31, 2004:

7.875% note payable to an insurance company due in monthly payments of $35,633, including interest, through June 2015, collateralized by real estate and assignment of lease payments from the property.		$3,186,834
4% note payable to financial institution due in monthly payments of $3,251, including interest, through January 2005, with a balloon payment due at that time, interest adjusted based on changes in the prime rate, collateralized by real estate.		131,736
Prime rate note payable to financial institution due in monthly payments of $1,330, including interest, through December 2006, with a balloon payment due at that time, interest adjusted based on changes in the prime rate, collateralized by real estate.		102,352
		3,420,292
Less current maturities		241,804
	$	3,179,118

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Critical accounting Policies

Management of the Company has identified the following as critical accounting policies:

• Estimates of useful lives of investment property for depreciation purposes.

• Evaluation of long-lived assets for impairment.

Results of operations

The Company’s results of operations for the six month period ended March 31, 2004, and a comparative analysis of the same period for the 2003 year are presented below:

					Increase (Decrease) 2004 Compared to 2003
	2004		2003		Amount			Percent
Leasing revenue	$	411,852	$	376,747	$	35,105		9.32	%
Operating expenses		213,286		221,820		(8,534	)	(3.85	)%
Interest expense		133.079		141.504		(8,425	)	(5.95	)%

Revenue from leasing consists primarily of revenue from the Company’s strip center on Washington Road in Augusta, Georgia, revenue from the office building on old Evans Road in Evans, Georgia, and revenue from a ground lease with a retail store on outparcel property near the strip center. Revenue from leasing increased from 2003 to 2004 due primarily to the ground lease on the outparcel property which was not in effect in the six months ended March 31, 2004.

5

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Refer to the Company’s Form 10-KSB for the year ended September 30, 2003 for further information regarding the properties owned and lease terms.

Operating expenses for the six months ended March 31, 2004 have increased as compared to the six months ended March 31, 2003. The increase is primarily due to increases in depreciation, property taxes, and repairs and maintenance. The increase in depreciation expense is a result of additional depreciable leasing property acquired by the Company. The increase in property taxes is a result of an increase in the assessments by the taxing authorities. The increase in repairs and maintenance is a result of additional repair costs incurred related to the strip center. Management of the Company expects operating expenses for the remainder of the current fiscal year to be comparable to the present three-month period. Interest expense for the current period is comparable to 2003 and, on an annualized basis, is comparable to the Company’s interest expense for the fiscal year ended September 30, 2003.

During the quarter ended December 31, 2003 the Company sold the property located at 4269 Washington Road, Augusta, Georgia. The Company recognized a gain of $205,928 on the sale. The sale transaction has been structured as a tax-deferred like-kind exchange under Section 1031 of the Internal Revenue Code. The Company has identified potential replacement properties but has not completed the property acquisition. The funds for acquisition are being held by a third-party intermediary and are presented on the Company’s balance sheet as Replacement Property Funds.

The Company’s ratio of current assets to current liabilities at March 31, 2004 was .22. The ratio was .21 at March 31, 2003.

During the current quarter the Company satisfied liquidity needs through operating revenues. Management of the Company continues to expect future liquidity needs to be met from operating revenues of the Company.

The Company does not expect any significant change in the number of employees.

Cautionary Note Regarding Forward-Looking Statements:

The Company may, from time to time, make written or oral forward-looking statements, including statements contained in the Company’s filings with the Securities and Exchange Commission (the “Commission”) and its reports to stockholders. Such forward-looking statements are made based on management’s belief as well as assumptions made by, and information currently available to, management pursuant to “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, but not limited to, competition from other real estate companies, the ability of the Company to obtain financing for projects, and the continuing operations of tenants.

6

Item 3. Controls and Procedures

Within the 90 days prior to the filing date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Company’s Chief Executive Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company’s SEC filings. Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in Company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date the Chief Executive Officer carried out the evaluation.

Part II - Other Information

Item 6. Exhibits and Reports on Form 8-K

.

(a)		Exhibit No.	Description
		31.1	Certification Pursuant to Section 302 of the Sarbanes – Oxley Act of 2002
		32.1	Certification Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
(b	)	No reports on Form 8-K were filed during the three months ended March 31, 2004.

7

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SECURITY LAND AND DEVELOPMENT CORPORATION

(Registrant)

By:	/s/ T. Greenlee Flanagin	August 13, 2004
	T. Greenlee Flanagin	Date
	President
	Chief Executive Officer

8

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, T. Greenlee Flanagin, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Security Land and Development Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and I have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonable likely to affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls;

Date: August 13, 2004

/s/ T. Greenlee Flanagin

T. Greenlee Flanagin

President and Chief Executive Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Security Land and Development Corporation (the “Company”) on Form 10-QSB for the quarter period ended March 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, T. Greenlee Flanagin, President and Chief Executive Officer of the Company, does hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ T. Greenlee Flanagin
	T. Greenlee Flanagin
	President and Chief Executive Officer
	August 13, 2004